We've heard rumors that Sprint is considering outbidding T-Mobile for MetroPCS's affection. Just in case that doesn't work, though, Sprint wants us to know that there is another plan in the works: being purchased by Softbank. Since most of you likely aren't up to date on Japanese telecoms, here's the deal: Softbank is a Japanese telecom. The third largest wireless carrier in the country, so a bit of a kindred spirit with Sprint. Now, the Japanese company may be interested in purchasing big yellow. Rumors broke earlier today, and now Sprint has sent out this brief press release to confirm:

Sprint (NYSE: S) today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint. Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached.

Of course, this doesn't mean much for certain. As Sprint is quick to point out, a deal hasn't been reached. However, it would make a certain degree of sense. Softbank has been buying up plenty of companies lately, and did a marvelous job of turning around Vodafone's Japanese business after its acquisition. Previous rumors implied that the company wanted to purchase up to "two thirds" of Sprint's stock. Substantial investment indeed.

A change in leadership and influx of money could be a huge boon for Sprint. The company has struggled under the weight of AT&T and Verizon's dominance. The Now Network has done everything it can to keep customers, including holding on to its unlimited data plans, even at the expense of a variety of other programs. It's unclear just how new leadership might affect what the company decides to keep or cut. However, a sudden injection of large amounts of cash could be just what the doctor ordered to keep Sprint afloat long enough to get its LTE network up to speed.

Comments

Freak4Dell

Hopefully this happens, and the first thing they do is kick that idiot of a CEO out on the street where he belongs.

lumpia91791

That idiot why subscribers still have unlimited data without jumping through hoops. The unlimited everything and any mobile concept came from this desperate company. When you have nothing to lose sometimes the consumer benefits. He took over a sinking ship from the previous CEO. Sprint HAD to do something or lose that 4G spectrum they used for WiMAX. At the time it was either WiMAX or LTE and Sprint moved first.

rapperman

Sprint took a gamble with Wimax in order to gain leverage on the "Big 2." That gamble failed but I can't say that it wasn't worth a shot. In my mind Hesse is doing what he can with the limited resources he has in order to remain an option in peoples eyes. I don't think he has a great deal of leverage with device manufacturers because he is at a financial disadvantage. In my mind the only reason the ship hasn't sunk yet is because of the reality of unlimited data and the promise of LTE.
I agree with DavidKeith above that it Sprint can hold out long enough and remain on it's own it can supplant AT&T in the number two spot provided they can rollout their LTE at an accelerated pace and somehow manage to secure good devices. Windows Phones are another gamble at this point, but because Microsoft is desperate to gain marketshare it is likely to be far less costly a gamble than the iPhone was.

Freak4Dell

That idiot has waged a war on loyal customers, causing customers with histories of over a decade of business with Sprint (like myself) to leave. That idiot that tried to stuff an everything plan down everyone's throats, even if only 1 person out of a 5 person family needed a smartphone. That idiot was hired to fix the Nextel debacle, yet sat idly by and watch as millions upon millions of customers left instead of converting to the Sprint platform, waiting until nearly 7 years after the Nextel purchase to offer up a PTT solution on the Sprint CDMA network. That idiot has overseen multiple policy changes that affect millions of customers mid-contract and refused to let customers leave according to the terms of the contract, forcing the customers to get 3rd party agencies involved. Even Verizon has the decency to not spring a change on customers in the middle of the contract, and they even extended the courtesy of letting people keep their unlimited data plans so long as they didn't ask for a subsidy. That idiot has also overseen numerous price hikes over the years, pretending that Sprint is a premium carrier when in reality the network can't handle the load of a telegraph. That idiot took over a ship with a small hole, and proceeded to make the hole bigger and bigger, causing the ship to sink faster and faster. That idiot continues to whore out his network to every MVNO with a Lincoln in their pocket, forcing high-paying post-paid customers to share an already overloaded network with even more people.

Dan Hesse is a complete parasite to Sprint, and has yet to do anything good for that company. He shouldn't be managing a lemonade stand, much less a multi-billion dollar corporation. A SoftBank buyout and a new CEO would give Sprint a chance to become truly competitive again. They desperately need the money and somebody who knows how to use the money wisely.

Nice investigatory work, interesting to see what could come from all of this and how it could affect Sprint customers in America

rapperman

While the author see's this a "good thing" I see this as an acknowledgement by Sprint that they are near the end of their financial rope. While the iPhone deal was an absolute must from a business perspective the financial impact was a huge burden on the company. Couple that with the need to move to LTE in order to stay competitive and you have 2 huge financial deals that have Sprint teetering at the edge of bankruptcy. This move, which apparently will grant Softbank control of the company will likely result in the adoption of limited data plans which imho will result in a slow and painful downward spiral and ultimately lead to the demise of the company.

Sprint's been at the end of their financial rope for a long time. I honestly doubt that a company is going to buy Sprint just to continue the downward spiral. Being purchased by a bigger company sure doesn't guarantee success, I'll give you that, but the whole point of an acquisition is to alleviate the previous problems.

There's nothing to indicate that being acquired by Softbank will inherently mean the death of unlimited data plans. There's also nothing to indicate that, even if that were to happen, that it would spell the end of Sprint. Note that the two biggest carriers in the company both switched to tiered data and there was no exodus. Why? Because they have service people can rely on. Sprint doesn't, in a lot of areas. If they were to get a substantial investment, as they're hoping, maybe Sprint could get a decent network going. But, as is said often enough online, unlimited data doesn't mean anything if you can't use it.

This is coming from a Sprint customer, by the way.

rapperman

Eric, I too am a Sprint customer. Been with them for at least 12 years. The only reason I am still with them is because of their unlimited data. Fact is however their data speeds suck. And what kills me is that I am paying a $10 premium for the priviledge! Once LTE hits my area I'm sure that unlimited data will be a great selling point, but for now downloading an app like Soundhound via Sprint takes nearly 5 minutes, is terribly frustrating and does not make for a positive endorsement from anyone. To try a sell a tiered data plan under those conditions would be ludicrous.
Meanwhile it should be noted that AT&T and Verizon are both correct when they state that the majority of users use less than 2GB of data per month. It's also true that the majority of users have every expectation that their bills will remain the same on a monthly basis and pay little attention to their bills. However when you add teens and young adults to the equation along with their desire to use streaming services you very quickly learn that there is very little to be happy about with regard to tiered data or family shared data plans as the costs associated with mobile use at that point skyrocket. Those plans were designed for profit. Pure and simple. If you truly believe the carriers when they tell you that the motivation behind those plans are simply to provide value to their loyal customers, give me a call... I've got a bridge in Brooklyn for sale.

I hope that if Sprint tries to purchase MetroPCS they are denied. . I hope T-Mobile can close the deal, and open up some more spectrum, and gain more customers. This would make T-Mobile a better player against the other giants. If T-mobile grows bigger, it can only put more pressure on the big dogs to get more competitive.

DavidKeith

i don't know.. If Sprint can weather through all of this crap and come out with a decently large LTE network they have a shot at being number 2.

Sprint will NOT get rid of unlimited data for long time (unless they get bought out) Sprint can do soo much if they just get out of this slump..

And I have a way to fix it.. stop giving AT&T all these new freakin phones and get some new phones Sprint. How about a Windows phone while your at it! You just got the iPhone so keep expanding.

Yes. Lets sell all the companies to Europe and Asia. Thats the spirit. Im dropping Sprint anyways for the new Nexus so go F yourself Dan Haase.

Simon Belmont

The new Nexus will probably be on Sprint too. So, you aren't really accomplishing much.

Also, it's Dan Hesse. If you're going to flip someone off, you might as well address them correctly, right?

cody kain

This could be good because of the influx of cash and Hesse isn't the problem I don't think as some people are saying.. sprints better now then before he took over. One can only do so much with a company falling to its knees. also if it turns out they change to much and I don't like it I guess ill be going to t mobile. Cause vzw is expensive.

Eric Jones

Not sure if this was good or bad for Sprint and it's customers, but it was a good day for my Sprint stock!

Stephen Egemasi

I own Sprint phone and i can say that after this nonsense about their 4G LTE, they still suck.. The company needs help. The signal strength is so bad beyond comprehension..

Ned Flembkin

So, everyone in the US is terrified that a Chinese telecom will steal their secrets (Huawei), yet they'll allow a Japanese telecom to buy Sprint outright?